Executive Briefing September 29, 2017

HILL UPDATE

Executives from Facebook, Alphabet’s Google and Twitter have been asked to testify before the U.S. Congress in coming weeks as lawmakers probe Russia’s alleged interference in the 2016 U.S. election, committee sources said on Wednesday. A Senate aide said executives from the three firms had been asked by the Senate Intelligence Committee to appear at a public hearing on Nov. 1. The leaders of the House of Representatives Intelligence Committee said the panel would hold an open hearing next month with representatives from unnamed technology companies in an effort to “better understand how Russia used online tools and platforms to sow discord in and influence our election.”

ARTICLE SUMMARY

Amazon, Facebook, Microsoft, Salesforce and other top technology companies plan to commit a total of about $300 million toward boosting computer-science education in the United States, as the White House seeks to prepare more students and workers for jobs of the future. The tech giants are set to announce their new investments on Tuesday in Detroit, at an event spearheaded by Ivanka Trump, the president’s daughter and adviser. It comes a day after President Donald Trump signed a policy memo, first reported by Recode, that directs the U.S. government to devote more grant dollars toward coding education and similar programs.

Google has rolled out changes to how it displays search results for products in Europe to try to comply with an EU antitrust ruling against its Google Shopping search comparison service. A multi-year EU antitrust investigation into Google’s practices around search comparison ended this June with the European Commission handing the company a €2.42 billion (~$2.73BN) fine for antitrust violations pertaining to its treatment of comparison shopping services.

Darktrace, founded by Cambridge University mathematicians and ex-British spies, uses machine learning to define what “normal” looks like for any network and all its devices and then report on deviations and anomalies in real time. That’s a big break from the usual security routine of cataloguing prior attacks and guarding against repeat performances. Darktrace CEO Nicole Eagan argues that artificial intelligence is the only way to defend networks against the “unknown unknowns”—the inside jobs and novel exploits your antivirus scan won’t find.

Apple gets sued for patent infringement dozens of times each year, mostly by little-known shell companies with no products—the types of companies often derided as “patent trolls.” But the newest lawsuit seeking royalty payments from iPad sales is likely a first: the recently created plaintiff, MEC Resources LLC, is wholly owned by a Native American tribe. The MEC lawsuit appears to be using Native American legal rights to avoid having the US Patent Office perform an “inter partes review” that could invalidate the patent.

The rise of global technology superstars such as Amazon, Apple, Facebook and Google is creating new challenges for competition watchdogs. In 2017 they joined Microsoft Corp. to become the five most-valuable companies in the U.S., a ranking that included only the software company 10 years ago. They dominate their markets, from e-books and smartphones to search advertising and social-media traffic on mobile devices. New research connects the market power of these high-tech behemoths — part of a broader rise in concentration in many industries — with chronic economic problems, including the decline in workers’ share of national income and slower economic expansions. Their dominance is fueling a global debate over whether it’s time to rein in such winner-take-all companies.

WASHINGTON (Reuters) – U.S. President Donald Trump on Wednesday criticized Facebook Inc (FB.O) as “anti-Trump” and questioned its role during the 2016 presidential campaign, amid probes into alleged Russian interference in the election and possible collusion by Trump’s associates. His salvo came as the social media giant prepares to hand over 3,000 political ads to congressional investigators that it has said were likely purchased by Russian entities during and after last year’s presidential contest. Trump appeared to embrace the focus on the social media network in his comments on Wednesday, which also took aim at more traditional medial outlets, long targeted by the president as “fake news.”

During NAFTA hearings in Ottawa last week, the CBC reported on Wednesday, Bell Media (one of the country’s “big three” telecom companies) stated that Canada needs stronger copyright protections. The best way to do this, the company contended, is to block websites that serve pirated content in the country. The idea is that the Canadian Radio-television and Telecommunications Commission (CRTC) would oversee an independent organization to draw up a list of blacklisted sites, which Bell and other service providers in Canada would then block Canadians from visiting.

Jay Clayton, the head of the Securities and Exchange Commission, told a Senate panel Tuesday that he found out about a serious security breach at the agency belatedly and that determining the extent of the intrusion could take a significant amount of time. Clayton said he didn’t become aware of a 2016 security breach until last month when the issue emerged as part of a separate investigation. After he learned of the hack, Clayton said, he ordered an internal review. That’s when he discovered that the breach may have allowed hackers to make an illegal profit by trading stock, he said.

Europe is considering changing its copyright law. At first blush, you might think this couldn’t possibly affect the way you debate the news of the day online, upload family videos or run your startup. But popular proposals at the EU would strike at the heart of the internet’s openness and accessibility as a platform by raising new barriers to interactive online services around the world. The goal of these copyright changes is to adopt new protections for publishers and artists. But if they are put in place, the burdens they would place on internet platforms would curtail the kind of quick uploading, sharing, commenting and responding that makes the Web so useful. Additionally, we have no reason to believe that these new plans would actually benefit the journalists and artists in whose name the measures are being proposed.

Newsweek reported on a survey published by the Pew Research Center, finding that a majority of Americans, regardless of age or political affiliation, believe it is very or somewhat likely the U.S. government is monitoring their phone calls and emails. The poll found that Seven-in-ten U.S. adults believe it is at least somewhat likely that their phone calls and emails are being monitored by the U.S. government, including 37% who believe that this type of surveillance is “very likely.”

THINK TANK/TECH TRADE ASSOCIATION HIGHLIGHTS

Brookings Institution

Blog post on tech regulation: Technology policy manager Tom Struble wrote, “In order to protect both consumers and competition, we need to regulate all of these internet gatekeepers, including broadband providers and other actors in the ecosystem with the power to censor or distort the free flow of information online. However, we shouldn’t regulate them like public utilities, as that will only serve to depress competition and hurt consumers over the long run. We need to embrace strong antitrust and consumer protection laws instead.”(BROOKINGS BLOG – For internet gatekeepers, consumer protection laws are better than utility-style regulation, Tom Struble, September 26, 2017)

Report on broadband subscriptions: “In a new report from the Metropolitan Policy Program at Brookings, researchers find that while over 90 percent of Americans live in places where wireline broadband is available, over 73 million live in neighborhoods where in-home broadband subscription rates are below 40 percent.” Moreover, “While 7 percent of Americans lack access to 25 Mbps broadband (the current U.S. standard for what constitutes ‘broadband’), rural communities experience the largest broadband access gap.” The authors note that “One of four rural residents does not have access to 25 Mbps broadband.” (BROOKINGS REPORT – Top 5 and bottom 5 US metro areas for broadband subscription, By Fred Dews, September 22, 2017)

Online Privacy: The U.S. Department of Homeland Security will begin collecting social media information and search results to include in immigration records starting on October 18, according to a rule published in the Federal Register last week. The policy will affect individuals going through the immigration process as well as naturalized citizens. The goal of the policy, which seeks to update the Privacy Act of 1974, is to “streamline immigration recordkeeping” so that the DHS agency can consolidate official records into one immigration record. The policy will allow the agency to pull new sources of information into that record including “social media handles, aliases, associated identifiable information, and search results.” The new policy will not just affect recent immigrants to the United States — but permanent residents and naturalized citizens as well. (Homeland Security to Monitor Social Media Accounts of Immigrants and Citizens by Esther Yu Hsi Lee September 26, 2017)

Blog post on FISA Section 702 compliance violations: Policy counsel and government affairs lead Robyn Greene highlighted four timelines that “display records of compliance violations with Section 702 of the Foreign Intelligence Surveillance Act.” She wrote that “these hundreds of violations represent systemic problems that result from the scope and complexity of the Section 702 surveillance program.” (NEW AMERICA BLOG – A History of FISA Section 702 Compliance Violations, By Robyn Greene, September 28, 2017)

Comments on broadband deployment: The Open Technology Institute (OTI) “filed comments with the Federal Communications Commission (FCC) about the availability of broadband across the United States.” OTI explained in the comments “that mobile broadband is not a substitute for fixed broadband—they are complements.” Additionally, it urged “the FCC to continue steadily increasing its speed benchmarks to reflect the changing nature of fixed broadband.”(NEW AMERICA BLOG – OTI Submits FCC Comments on Broadband Deployment, By Amir Nasr, September 26, 2017)

NOTABLE QUOTES

“The bilateral surveillance agreements authorized by the DOJ bill would not be limited to nations that, like the U.K., have a legal system that overlaps significantly with the U.S. legal system. Rather, the U.S. executive branch could enter bilateral surveillance agreements with virtually any other nation, even ones that now systematically abuse human rights… To make matters worse, the bill would bar any judicial or administrative review of whether the U.S. executive branch properly entered a bilateral surveillance agreement. Further, these bilateral agreements would not require any Congressional ratification. This places too much power in the hands of the U.S. executive branch to authorize foreign nations to seize U.S. data.”

“Facebook would be likely to make the argument that a warrant is required for this information because tech companies have incentives to require a warrant before disclosing sensitive information when ECPA is ambiguous, particularly in high profile cases such as this one. Consumers pay attention to privacy in the post-Snowden era, and companies have responded by ramping up their scrutiny of legal process and transparency reporting about government surveillance requests.”

“When the founding fathers drafted the Bill of Rights, more specifically, the Fourth Amendment, they would have never imagined the vast breakthroughs in technology that we see today. In drafting the Fourth Amendment, James Madison guaranteed a “right of the people to be secure in their persons, houses, papers, and effects;” an umbrella of protections. The Fourth Amendment should continue to be read with such broadness, especially in the age of the cloud. There is a need for law enforcement to gain access to cloud accounts through warrants, but the rights of U.S. citizens cannot be ignored.”

“American companies are finding themselves in the predicament of being subject to contradictory laws, as they are unable to reconcile U.S. law enforcement access to data under ECPA with the privacy laws in the country in which the data is stored… The last thing I would want is to be unable to comply both with America’s laws and with laws of my varied, geographically diverse users. As a software consultant, it would be disappointing to see an international customer refuse to host data under American cloud services because they are unsure of if and how their data may be accessed.”

“We see this as part of a larger process of high tech surveillance of immigrants and more and more people being subjected to social media screening… There’s a growing trend at the Department of Homeland Security to be snooping on the social media of immigrants and foreigners and we think it’s an invasion of privacy and deters freedom of speech.”

“This Privacy Act notice makes clear that the government intends to retain the social media information of people who have immigrated to this country, singling out a huge group of people to maintain files on what they say. This would undoubtedly have a chilling effect on the free speech that’s expressed every day on social media.”

“Yes, our rights at the border including for citizens are more limited than in other parts of life, but this is a gross invasion of your privacy and is far beyond the boundaries of a reasonable search. With these widespread fishing expeditions, who knows when or where that data about you will pop up again, particularly when you’re asked to divulge spaces online where you thought you might have been anonymous or pseudonymous.”

“The warrants at issue authorize precisely the type of fishing expedition that the Fourth Amendment prohibits. A huge quantity of information, both personal information about communications with romantic partners, and medical and psychiatric information and family photos, will be released. And equally if not more troubling … the political associations and political activities of both the users and third parties with whom they communicate, will also be revealed.”

“I think falsely, sometimes people assume that more surveillance is going to make them safer. And in fact, there have been past programs that collected large amounts of data that actually weren’t effective at all — didn’t stop terrorists, didn’t identify terrorist suspects. The second thing that I think is really important to highlight is many of these NSA programs, we talked about them being about terrorism but that’s actually not accurate. In reality, the government collects information about people who have nothing to do with terrorism. They’re using the information from these warrantless collective programs for purposes that have nothing to do with national security.”